27th November 2017 2018 – Contribution by Lord Waverley
My Lords, I offer a warm welcome to the Minister and should let her know that we are here to help—although on occasion it might not seem so. I congratulate, too, the noble Lord, Lord Popat, on securing this debate. One of the great joys in life is waking up to an African dawn.
Notwithstanding the continued march of globalism, cross-border global trade remains plagued by multiple barriers. These impede economic development in emerging economies, and particularly in small and medium-sized enterprises which take disproportionately little in world trade. The challenge has to be to address the factors that inhibit or prevent SMEs from exporting. A number of overarching principles ought to be considered central to increasing cross-border trade. These include targeting policy, especially towards SMEs and emerging markets, constructing policies in consultation with key stakeholders, growing an export culture, and raising international ambition, particularly through government briefings, school education, the improved teaching of modern languages and advisory services. I would encourage the Minister to have her team examine, if it is not already doing so, the range of existing policies and best practices from around the world, particularly on the challenge of removing informational asymmetries between market participants.
Trade is a multidimensional process that is based on four primary pillars: logistics, commerce, finance and insurance. But there is little linking within global value chains. More importantly, while the world is digitising many of its processes, this is being done in piecemeal fashion. Much of the progress to date has been between business and consumers, with relatively little from business to business. The core element, logistics, is the weakest link. The logistics industry as a whole is generally fragmented and inefficient. While some individual companies’ logistics are digitised—for example, the likes of FedEx and DHL—this has generally been done only vertically within each large company or has been limited to specific tiers within a supply chain. A horizontally integrated world trade digital economy platform would bring considerable benefits.
The digitisation and integration of these four elements, underpinned by a multidimensional platform, would bring efficiency gains, substantial reductions in the cost of trade and an expansion in the volume of world trade. The economic, social and developmental benefits globally, in particular for SMEs in emerging economies, would be significant. Such a platform would also include the de-risking of the business process, the improved provision of trade finance and insurance, the creation of new jobs, increased cargo security, reduced fraud and tax evasion, including VAT, expedited disaster relief responses and increased post-harvest yield and strengthened contaminated food containment. This would offer increased buying power in middle and lower-income countries, which could then buy our high-value goods and services.
I have been briefed on the technology of the public/private partnership Global Coalition of Efficient Logistics, GCEL, which has already been proved in practice. The first pilot test involving complex supply chains was across the US/Canada border, one of the world’s busiest land borders. The first benchmark trade lane is in the process of being deployed between China, Japan and Indonesia, at the request of their Governments. In addition, Asia-Pacific Economic Cooperation leaders have recently signed a memorandum of understanding for GCEL to digitise the operation of ports throughout the APEC region.
This trade digital economy platform technology could be an additional way to cement relationships within the Commonwealth and pan-Africa. The upcoming CHOGM, which we all look forward to—we wish the Government the best and welcome all our friends from around the world—could afford an opportunity for the UK to introduce a pioneering initiative of substance as a partner nation. I have no doubt that many small nations would take an interest.
Being innovative and achieving more with less is key to strengthening the UK’s position in tomorrow’s world. The UK is enviably well placed to spearhead and pioneer global development of the new digital economy, with our core skills and qualities of IT, innovation, finance, insurance, an educated workforce, a stable population, and the rule of law. However, we need to get a move on in readiness for the challenges and opportunities that will shortly be upon us.
Link to full contribution: http://bit.ly/2PD02gd